Antimicrobial resistance as an economic externality: optimal control, Pigouvian taxation, and governance implications

Antimicrobial resistance (AMR) poses a growing global health and economic threat, driven in part by misaligned incentives across healthcare, agriculture, and trade. This study uses a dynamic economic model to analyse how antibiotic use, resistance development, and societal costs interact, and evaluates policy interventions based on European data. The findings suggest that optimal antibiotic use should be reduced by approximately 8.6% compared to current levels, and that a modest Pigouvian tax (around $0.775 per dose) could help realign incentives if revenues are reinvested in diagnostics and stewardship. By incorporating this “revenue recycling” approach, the study demonstrates that targeted fiscal policies can both curb resistance and strengthen public health systems, supporting more sustainable, long-term AMR management strategies.